Bitcoin Hovers Near $57K as Crypto Market Dips 6% Ahead of Fed Announcement

BTC is down about 6.3% in the last 24 hours having dropped below the $60,000 support level late on Tuesday.

Bitcoin and the broader crypto market experienced a decline, with ether and other altcoins following suit. The financial markets have been affected by risk-off sentiment ahead of the Fed’s interest-rate decision and press conference today. 10x Research has set a price target of $52,000-$55,000, anticipating further selling pressure. Bitcoin traded around $57,700 during the European morning on Wednesday, hitting its lowest level since February-end, marking its worst month since November 2022. BTC has dropped about 6.3% in the past 24 hours, falling below the $60,000 support level. The Coin 20 Index (CD20) also lost nearly 9% before recovering some of the decline. Cryptocurrencies have been influenced by risk-off sentiment in the broader financial markets, amid concerns of slower growth and persistent inflation, reducing expectations of an interest-rate cut by the Federal Reserve.

Ether (ETH) declined by about 5%, falling below $3,000, while dogecoin (DOGE) saw the most significant drop among major altcoins, sliding by 9%. Solana (SOL) and Avalanche (AVAX) both experienced losses of around 6%.

Bitcoin had a negative month in April, marking its first monthly loss since August. The 16% decline was its most substantial since November 2022, during the FTX exchange collapse. Some analysts are now cautioning about the potential for further declines in the near term.

According to 10x Research, a digital asset research firm, there is selling pressure pushing towards the $52,000 level. This pressure is based on outflows from U.S. spot exchange-traded funds (ETFs), which have amounted to $540 million since the Bitcoin halving on April 20. The firm estimates that the average entry price of U.S. bitcoin ETF holders is $57,300, potentially serving as a critical support level.

Markus Thielen, CEO of 10x Research, wrote on Wednesday that the closer the spot price of bitcoin is to this average entry price, the higher the probability of further ETF unwinding.

Many ‘TradeFi’ tourists may have been in crypto, pushing long positions until the halving – but that time is over,” he wrote. “We anticipate more unwinding as the average Bitcoin ETF buyer will be underwater when Bitcoin trades below $57,300. This is likely to reduce prices to our target levels and cause a -25% to -29% correction from the $73,000 top – hence our price target of $52,000/$55,000 over the last three weeks.” Update (May 1, 8:56 UTC): Prices updated throughout. Update (May 1, 9:57 UTC): Prices updated throughout. Update (May 1, 11:05 UTC): Analysis from 10x added.